Impact of Working Capital Management on Profitability

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

Background of the Research Study1

Statement of the Problem1

Research Aims and Objectives1

Research Questions2

Importance of Working capital management4

Management of Inventory5

Cash Management7

CHAPTER 3: RESEARCH METHODOLOGY8

Introduction8

Data Collection8

Data Analysis8

REFERENCES10

CHAPTER 1: INTRODUCTION

Background of the Research Study

The research study is based on the impact of working capital management on the profitability. Due to the credit crunch crises of 2008 has a major impact on the economies all around the world. This will also have a direct effect on the company's existing in the economy. The management will be thinking of efficient use of cash. Liquidity has become and will remain less freely available and more expensive. Credit risk will be a key differentiator in determining availability, pricing and conditions to borrowers.

Eventually the top executive management will be carefully analyzing their respective organization to look for improvement in efficiency also to release the hold cash in their hand. A recent analysis of 3,774 companies worldwide suggests that to date no meaningful improvements made in the management of working capital. On the contrary, relative to revenue, inventory and receivables positions have increased by an average of 4.3 days of sales or 5% in value. This equates to an additional EUR 183.5 billion of liquidity trapped in the supply chain for all 3,774 companies under review. Buyers have effectively added funding of EUR 55.4 billion, equivalent on average to 1.3 days worth of sales from their suppliers.

Statement of the Problem

The working capital management is an important consideration for the organizations as it affects the profitability of the firms to greater extent.

Research Aims and Objectives

The aims and objectives of the research study are:

To analyze the impact of the working capital management on the profitability of the organization

To evaluate the impact of the working capital management in case of Bottler's Nepal Ltd in order to check the relationship between the working capital and profitability

To analyze different factors of the working capital that affect the profitability within an organization.

To analyze different ratios that help in checking the impact of working capital on the profitability of the organization.

To suggest new ways of how the working capital management affect the profitability in the organization.

Research Questions

What is working capital management?

What is the impact of working capital management on the profitability of the organization?

How the working capital management has affected the profitability in case of Bottler's Nepal?

What are the variables that are usually used for analysis of the working capital within the organization?

What is the importance of Working Capital Management in the organizational operations?

CHAPTER 2: LITERATURE REVIEW

Working Capital

Working Capital ...